HUD's $860M IT contract remains in bid limbo

Computerworld - An $860 million IT services contract awarded last year by the U.S. Department of Housing and Urban Development to Electronic Data Systems Corp. remains in limbo, and a deadline for updated proposals has been extended to the end of the month.
Yesterday was supposed to be the deadline for the two companies fighting for the contract to submit their proposals. But HUD pushed back that deadline to March 31 to "give both parties more time to give their best proposals and best meet government needs," said Michael Fluharty, a HUD spokesman.
The EDS contract is in limbo because of a bid challenge from the existing contractor, Lockheed Martin Information Systems, and because of a U.S. Government Accounting Office (GAO) report last December that criticized the EDS deal because of alleged errors in the bid award process (see story).
"Clearly, everything we've done here is to try to be in the best interests of the government and the taxpayers," Fluharty said.
HUD had hoped to have the new contract finalized in May, but that date is now uncertain.
The fight revolves around a HUD request for proposals (RFP) for IT services, including information processing, telecommunications, storage, maintenance, upgrading, backup and operation of all computer hardware, and systems management for an initial period of one year, with nine one-year options.
In a related development, Lockheed Martin's Simulation, Training & Support (STS) division in Orlando, whose protest over the original bid led to the critical GAO report, filed a second protest with the agency on Wednesday, protesting "concerns about HUD's solicitation for new proposals and numerous solicitation amendments" in the rebidding process.
"Despite the GAO's Dec. 18 finding that Lockheed Martin was unfairly evaluated against competitor Electronic Data Systems in the first competition, the new solicitation, we feel, still favors EDS," Nettie R. Johnson, a spokeswoman for Lockheed Martin STS, said in the protest statement.
Kevin Clarke, a spokesman for Plano, Texas-based EDS, was critical of the latest delay and of the Lockheed protest.
"Until now, EDS has been really willing to abide by the terms of the RFP and HUD's timeline for completing these actions," Clarke said. "But it appears that Lockheed Martin is attempting to manipulate the terms and the timeline to their own advantage."
EDS offered a protest of its own to the agency, alleging that the amended RFP provides Lockheed with a "tremendous competitive advantage in that it allows Lockheed Martin to liberally change the initial proposal," Clarke said. EDS has asked the agency not to require full rebids of the entire contract and said rebidding should focus only